Integrated Reporting and Value Creation: the Semantics of the Fundamental Concept of Integrated Reporting

Abstract

The objective of this research is to build the semantics of the concept of value creation based on the existing literature, delimited to the Integrated Reporting (IR) proposal. It is a descriptive, bibliographic and documentary study, developed with use of content analysis. Sixteen articles, three books and one document were analyzed, based on the “Value Creation – Background Paper” (International Integrated Reporting Council, 2013a), as well as on the semantic classification proposed by Ilari and Geraldi (1985). The results show that the semantics of the concept of value creation is that the organization carries out actions of values (capitals) created directly or indirectly, considering only their positive effect on society and the environment. Negative actions cause value destruction for shareholders and stakeholders, and they are not reported when expected to be. Financial value is relevant, but not enough to create value. The absence of explanations on the subject makes it possible the non-adoption of the real purpose in the construction of the connectivity of financial and non-financial information, consequently damaging the credibility of this new corporate disclosure format. The research encourages discussions to fill gaps and counter criticisms, especially international ones. It contributes to the interpretation of the concept of value creation for future IR disclosures, clearly elucidating what would be the organization’s value creation and accountability to society, in view of the difficulty in applying this concept in public consultations (2013 and 2017), as revealed by preparers. This research also contributes to advancing the discussion in the literature in the value creation context.

Invisible shareholder: a theoretical perspective on the relationship among natural capital, business, and society

“…Additionally, financial reports often fail to adequately capture the relationship between business and the environment (Houdet, Ding, Quétier, Addison, & Deshmukh, 2020;Unerman, Bebbington, & O'dwyer, 2018). The lack of clarity on this topic makes it challenging to grasp the true purpose of integrating financial and non-financial information (Marçal, Neumann, & Sanches, 2022;Wagenhofer, 2023).…”

Multicriteria Decision Support Methods for Evaluating Sustainable Performance in Organizations: A Systematic Literature Review

“…The issuance of regulations by the TCU and CVM, based on the IR, is due to the fact that this document seeks to go beyond simple financial reporting, integrating information on how the company creates, preserves and shares value over time , taking into account not only economic aspects, but also environmental and social ones. However, the shared value of a company created in IR is only considered if it is attributed to environmental, social and corporate governance ( Environmental, Social and Governance -ESG) in management strategies and decisions, as the shareholder's financial perspective usually provides greater returns , benefiting both interests (shareholder and society) (Marçal et al, 2022). With this, IR contributes to greater transparency and accountability of companies in relation to their sustainable development practices.…”

Shareholder invisível: uma perspectiva teórica da relação entre capital natural, negócios e sociedade

“…Também a relação dos negócios com o meio ambiente ainda não se reflete nos relatórios financeiros (Houdet, Ding, Quétier, Addison, & Deshmukh, 2020;Unerman, Bebbington, & O'dwyer, 2018). Além disso, a ausência de esclarecimentos sobre o tema impossibilita a compreensão do real propósito da integração entre as informações financeiras e não financeiras (Marçal, Neumann, & Sanches, 2022;Wagenhofer, 2023).…”

“…Além disso, o Carbon Disclosure Project (CDP), a Task Force on Climate-Related Financial Disclosures (TCFD), o Taskforce on Nature-related Financial Disclosures (TNFD) e o World Economic Forum's Stakeholder Capitalism Metrics compreendem iniciativas de relatar os riscos e as oportunidades dos negócios relacionados à natureza (Modak, Mathur, & Vaidyanathan, 2019;Torres, Ripa, Jain, Herrero, & Leka, 2023;Wagenhofer, 2023). Marçal et al (2022) analisaram o termo "valor" e concluíram que, na perspectiva semântica do conceito de criação de valor, a organização realiza ações de valores (capitais) criados direta ou indiretamente. Nesse caso, no entanto, as empresas consideram apenas seu efeito positivo na sociedade e no meio ambiente; não relataram, assim, efeitos negativos que causam destruição de valor para os shareholders e demais stakeholders.…”